CME statement on tax competitiveness announcement

Canadian Manufacturers & Exporters welcomes today’s announcement that improves tax competitiveness for small Canadian manufacturers and that addresses several of our concerns regarding the proposed changes to the tax treatment of Canadian-controlled Private Corporations (CCPCs). In particular, we support the decision to abandon proposed changes to lifetime capital gains exemptions that would have penalized the intergenerational transfer of family businesses. Measures to simplify the rules surrounding eligible income splitting are also welcome.

The federal government has also indicated that additional changes will be announced in the coming days regarding the taxation of passive income held inside corporations. We continue to look for changes that would encourage entrepreneurship, innovation and growth. We also anticipate changes that better reflect key differences between business income and salary income, as well as the personal risks often associated with small-business ownership.

About the Canadian Manufacturers & Exporters:

Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and thrive around the world. In 2016, CME released Industrie 2030 - a roadmap for doubling Canadian manufacturing activity by 2030. Our focus is to ensure the sector is dynamic, profitable, productive, innovative and growing. We aim to do this by strengthening the labour force, accelerating the adoption of advanced technology, supporting product commercialization, expanding marketplaces and, most importantly, ensuring a globally-competitive business environment. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada's exports.